Introduction

Tata Steel Limited, headquartered in Mumbai, Maharashtra, India, is an Indian multinational steel-
making corporation centred in Jamshedpur, Jharkhand. The Tata Group owns the company.

Tata Steel, formerly known as Tata Iron and Steel Company Limited (TISCO), is one of the world's
largest steel producers, with an annual crude steel capacity of 34 million tonnes. With activities and
commercial presence all over the world, it is one of the world's most geographically diversified steel
makers.

In the financial year ended March 31, 2020, the group (excluding SEA activities) had a consolidated
turnover of US$19.7 billion. With an annual capacity of 13 million tonnes, it is India's second largest
steel company (measured by domestic production) after Steel Authority of India Limited (SAIL).

Vertical Analysis of Balance Sheet and Cash Flow statement of 2019-20

Common Size Statement of TATA Steel Balance Sheet - 2019 & 2020
Percentag
Particulars Mar-19 (Base) Mar-20 (Current) Change e
Equities and Liabilities  
Total Equity (Cr) ₹ 70,454.70 ₹ 74,563.10 ₹ 4,108.40 5.83%
Total Non-Current Liabilities (Cr) ₹ 39,175.00 ₹ 42,683.10 ₹ 3,508.10 8.95%
Total Current Liabilities (Cr) ₹ 25,593.70 ₹ 30,871.30 ₹ 5,277.60 20.62%
Total Equity and Liabilities (Cr) ₹ 1,37,498.40 ₹ 1,50,392.60 ₹ 12,894.20 9.38%
Assets  
Fixed Assets (Cr) ₹ 77,018.30 ₹ 79,480.40 ₹ 2,462.10 3.20%
Total Non-Current Assets (Cr) ₹ 1,20,462.80 ₹ 1,30,383.40 ₹ 9,920.60 8.24%
Total Current Assets (Cr) ₹ 17,035.60 ₹ 20,009.20 ₹ 2,973.60 17.46%
Total Assets (Cr) ₹ 1,37,498.40 ₹ 1,50,392.60 ₹ 12,894.20 9.38%

Analysis of Equity and Liabilities

Tata Steel in the financial year 2018-19, was able to keep its equity and stable and growing.
However, they actively borrowed capital, therefore the current liabilities increased by 20.62%.
Thus, pushing the overall increase in equity and liabilities to 9.38%.

Analysis of Assets

The company invested highly in short term assets (increased by 17.46%), followed by non-current
assets (increased by 8.24%). And therefore, utilizing the short-term borrowings.

Common Size Statement of TATA Steel Cash Flow Statement - 2019 & 2020
Particulars Mar-19 Mar-20 Change Percentage
Cash from Operating Activity (Cr)   ₹ 15,193.10 ₹ 13,453.70 -₹ 1,739.40 -11.45%
Profit Before Tax (Cr) ₹ 16,227.20 ₹ 6,611.00 -₹ 9,616.20 -59.26%
Interest (Cr) ₹ 2,823.60 ₹ 3,031.00 ₹ 207.40 7.35%
Tax (Cr) ₹ 5,694.10 -₹ 132.80 -₹ 5,826.90 -102.33%
Cash from Investing Activity (Cr) -₹ 16,350.00 -₹ 17,634.70 -₹ 1,284.70 7.86%
Cash from Financing Activity (Cr) -₹ 2,887.20 ₹ 4,629.80 ₹ 7,517.00 -260.36%
 Net Cash Flow (Cr)   -₹ 4,044.00 ₹ 448.80 ₹ 4,492.80 -111.10%

Analysis of Cash flow statement

The company saw a decrease in the earnings from Operations (by 11.45%) but received some funds
through investing activities (increased by 7.68%). The company relied heavily on short term
investments, and therefore a major of its cash flow was diverted towards Financing Activities.
Therefore, due to reduction in operating cash flow, and increase financing activities, the overall Net
cash flow has decreased by 111.10%.

Vertical Analysis of Balance Sheet and Cash Flow statement of 2019-20

Common Size Statement of TATA Steel - 2020 & 2021

Particulars Mar-20 (Base) Mar-21 (Current) Change Percentage
Equities and Liabilities  
Total Equity (Cr) ₹ 74,563.10 ₹ 90,488.30 ₹ 15,925.20 21.36%
Total Non-Current Liabilities (Cr) ₹ 42,683.10 ₹ 44,455.60 ₹ 1,772.50 4.15%
Total Current Liabilities (Cr) ₹ 30,871.30 ₹ 29,313.30 ₹ -1,558.00 -5.05%
Total Equity and Liabilities (Cr) ₹ 1,50,392.60 ₹ 1,65,036.00 ₹ 14,643.40 9.74%
Assets  
Fixed Assets (Cr) ₹ 79,480.40 ₹ 79,243.60 ₹ -236.80 -0.30%
Total Non-Current Assets (Cr) ₹ 1,30,383.40 ₹ 1,41,279.70 0.00%
Total Current Assets (Cr) ₹ 20,009.20 ₹ 23,756.30 ₹ 3,747.10 18.73%
Total Assets (Cr) ₹ 1,50,392.60 ₹ 1,65,036.00 ₹ 14,643.40 9.74%

Analysis of Equity and Liabilities

The organisation saw an increase in its equity by 21.36%, and its current liabilities too reduced by
5.05%, therefore reducing the burden on company. The company focused on repayment on its
liabilities.

Analysis of Assets

While the Non-current assets remained unchanged, the company invested heavily current assets,
therefore observing an increase of 18.73%. TATA steel also reduced it’s fixed assets by small margin
to fund its investing activities.

Common Size Statement of TATA Steel - 2020 & 2021

Particulars Mar-20 Mar-21 Change Percentage
Cash from Operating Activity (Cr)   ₹ 13,453.70 ₹ 29,368.60 ₹ 15,914.90 118.29%
Profit Before Tax (Cr) ₹ 6,611.00 ₹ 17,795.10 ₹ 11,184.10 169.17%
Interest (Cr) ₹ 3,031.00 ₹ 3,393.80 ₹ 362.80 11.97%
Tax (Cr) -₹ 132.80 ₹ 4,188.50 ₹ 4,321.30 -3253.99%
Cash from Investing Activity (Cr) -₹ 17,634.70 -₹ 13,008.50 ₹ 4,626.20 -26.23%
Cash from Financing Activity (Cr) ₹ 4,629.80 -₹ 15,852.00 -₹ 20,481.80 -442.39%
Net Cash Flow (Cr)   ₹ 448.80 ₹ 508.10 ₹ 59.30 13.21%
Analysis of Cash flow statement

The company observed a sharp increase in the earnings from Operations (118.29%) but paid large
amount of tax (increase by 3253.99%). This sharp increase in cash flow from operations pushed the
company to increase its investments in financing activities. The company relied heavily on short term
investments, and therefore a major of its cash flow was diverted towards Financing Activities.
Therefore, due to reduction in operating cash flow, and increase financing activities, the overall Net
cash flow has decreased by 111.10%.

Conclusion